Arnstein & Lehr Dealmakers Featured in Daily Business Review Article

Arnstein & Lehr Dealmakers Featured in Daily Business Review Article
March 31, 2015

Success With Past Project Helped Secure $136.5M Loan

 

 

Dealmakers: Luis Flores, David Shear, Rebecca Sarelson and Amanda Shear

The Deal: The attorneys in Arnstein & Lehr's Miami office represented Parque Towers Developers LLC in securing a $136.5 million construction loan from Wells Fargo Bank N.A. to build a high-end condominium complex in Sunny Isles Beach. The deal closed March 23.

Details: Parque Towers is an affiliate of Coral Gables-based developer J. Milton & Associates, which is known for its apartments but in recent years has focused on luxury condominiums.

J. Milton & Associates, founded by the late Cuban-born architect Jose Milton, has played an important role in transforming the Sunny Isles Beach skyline with condo projects such as Sands Pointe, Pinnacle, King David and St. Tropez Towers.

Parque Towers sits next to St. Tropez, and the two condos will share amenities of an upgraded St. Tropez Towne Center that include boutiques, cafes, a fine-dining restaurant and cobblestone piazzas with fountains. Flores said the concept is that condo owners could shop and dine without leaving the property.

Parque Towers, at 300-350 Sunny Isles Blvd., will have two towers at 25 and 28 stories and a total of 320 condos. Its amenities will include a pool, kids club, a party room large enough for 200 guests, wine bar, cigar club, theater and beach club.

While David Shear has a long relationship with J. Milton & Associates, Flores said his expertise is "running point" for large construction loans.

Wells Fargo knows J. Milton & Associates well. The bank, Wachovia at the time, provided the $125 million construction loan for St. Tropez. The project was launched in 2006 and the loan repaid in 2009 in the midst of the Great Recession.

That built trust with the lender, which was very willing to partner again with a developer with a proven track record, Flores said. Wells Fargo got before the proverbial ground floor of Parque Towers by making a $15 million investment in the land in 2014, he said.

With lenders cautious in the wake of the recession, Flores said the challenge is convincing them the developer will deliver a great product in a great location.

"Challenges arise from distinguishing your condominium from whatever else is on the market. There are so many cranes out there," he said. "The challenge is getting your lender to say, 'I am going to invest.' That is done by delivering a turnkey product that is sexier than anyone else's."

"The new cycle is so different," he said. "It is all about how do I prove that this is a developer that can deliver something no one is nervous about."

Flores does not see any signs that the booming high-end condo market is going to slow down. Rather, "I have seen confidence building," he said. "More lenders are coming into the market."

Flores has closed about $1 billion in construction loans in the last 18 months. The deals include a $104 million loan by Bank of the Ozarks and NorthStar Real Estate Income Trust for the 200-unit Echo Aventura in 2013, a $123 million loan by Canyon Capital Real Estate Advisors LLC for the 57-story Echo Brickell and a $167 million loan by Guggenheim Commercial Real Estate Finance for the 68-unit Muse in Sunny Isles Beach last year.

He also served as Florida counsel last year for lender Blackstone Real Estate Debt Strategies on construction loans that included $290 million for the Surf Club in Surfside, $120 million for Biscayne Beach in Edgewater and $102 million for Hyde Beach in Hollywood Beach.

J. Milton & Associates CEO Joseph Milton led negotiations for the developer. The team also included Yosi Gil, principal for condominium development and executive vice president; Rex Barker, executive vice president and chief financial officer; Douglas Ramberg, corporate controller; Juan Gudiño, project cost accountant manager; and Ary Gomez, executive assistant.

Comment: "I have to come to the market with all these factors—strong developer, sales team, location and buyers—that the lender says, 'This makes so much sense, I want to stand shoulder to shoulder with you," Flores said.

Background: Flores, David Shear and Sarelson are partners with the law firm. Flores chairs the firm's Florida commercial practice group. Shear focuses on condominiums and commercial and residential real estate. Sarelson focuses on international and domestic corporate transactions. Amanda Shear is a real estate associate.

To read this article in PDF format, please click here.

By Mary Hladky, Daily Business Review 

Reprinted with permission from the 4/1/15 edition of the DAILY BUSINESS REVIEW Copyright 2015 ALM Media Properties, LLC.